On 17 September 2017, ‘venture capital companies’ were introduced into the Jordanian Companies Law. This was followed, on 27 December 2018, by the issuance of a detailed regulation governing all matters relating to this form of company.

 

On 13 August 2023, ‘partnerships limited by shares company’—which had been introduced under the Companies Law of 1989 and had remained a recognised form of company under the Companies Law of 1997 until 2023—were abolished and replaced by ‘venture capital companies’.

 

On 10 June 2023, an article published in Al Ghad newspaper entitled “The Destiny of Venture Capital Companies” stressed the importance of learning from the experience of partnerships limited by shares, under which not a single company had been registered over a period exceeding thirty years. That form of company was eventually abolished on 13 August 2023. The article concluded that improving the quality of legislation and making it more attractive to investment should take precedence over the phenomenon of “legislative inflation”. This phenomenon adversely affects the efficiency and quality of legislation, particularly as it creates practical obstacles to the proper application of the law.

 

Today, more than nine years after ‘venture capital companies’ were first introduced into Jordanian legislation, and almost three years after their inclusion in the Companies Law as a distinct form of company, not a single venture capital company has been registered. Perhaps one of the principal reasons for the absence of any registrations lies in the joint and several liability inherent in this form of company. Consequently, investors have little incentive to accept such liability, particularly given that Companies Law already provides alternative corporate vehicles through which they may operate, such as limited liability companies and private shareholding companies.

 

The Companies Law is among the most important pieces of investment legislation, serving as the gateway through which individuals, investors and entrepreneurs enter the commercial and economic arena. It would therefore be more prudent to improve certain of its existing provisions than to burden it with provisions that serve little or no practical purpose. For example, priority should be given to improving the provisions governing limited liability companies rather than retaining provisions that are unlikely ever to be applied in practice. In practice, the legislative framework governing limited liability companies genuinely needs to be improved and amended to keep pace with contemporary requirements. The courts are increasingly compelled to apply certain provisions governing public shareholding companies to limited liability companies, even though those provisions may, by their very nature, be inconsistent with the needs of the shareholders in such companies.

 

According to figures published by the Companies Control Department, approximately 4,658 limited liability companies were registered in 2026, compared with 5,584 in 2025. Limited liability companies are among the most frequently registered and widely used forms of company in Jordan, accounting for the largest share of companies registered with the Companies Control Department. Today, this form of company is perhaps the one that the public and professionals most frequently deal with, including judges, fellow lawyers and accountants.

 

It must be emphasised that Jordanian experts, particularly those working in this field, are fully capable of addressing the issues associated with limited liability companies in all their aspects, improving the quality of the legislative provisions governing this form of company, and keeping pace with developments that serve the Jordanian market. There is no need whatsoever to engage experts from other jurisdictions to undertake this task, as has occurred in the past. Indeed, Jordan possesses the intellectual talent, professional experience and specialised expertise necessary to develop an integrated legal framework for limited liability companies: one that meets market needs, strikes an appropriate balance between regulation and the partnership relationship among the shareholders, and, most importantly, no longer depends on recourse to the provisions governing public shareholding companies. In other words, rather than applying the rules governing public shareholding companies to limited liability companies, it is possible to enact self-contained legislative provisions covering all aspects of the limited liability company.

 

Accordingly, rather than retaining the twelve articles of the Companies Law governing venture capital companies, twelve alternative articles could be introduced to govern limited liability companies and comprehensively regulate their affairs. This would be preferable to the legislative inflation from which the Companies Law suffers, and to its being overburdened with unused provisions that may never see the light of day.

 

Hope remains that even a single venture capital company may be registered in the period ahead. Yet the experience of partnerships limited by shares, which were abolished after more than thirty-four years without a single registration, has proved otherwise.